2018 (6) TMI 689

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....ds of appeal: "(i) The Learned CIT(A) has erred on facts and in law, in deleting the disallowance of Rs. 66,03,56,590/- made under section 40(a)(ia) of Income Tax Act, without properly appreciating the factual and legal matrix as clearly brought out by the Assessing Officer. (ii) The Learned CIT(A) has erred on facts and in law, in deleting the disallowance made under section 40(a)(ia) of the Income-Tax Act, despite the fact that assessee failed to deduct TDS and that the provision of the section 40(a)(ia) is very clear and there is no ambiguity which call for any judicial interpretation. 2. The Ld. CIT(A)'s order is contrary in law and on facts and deserves to be set aside. 3. The appellant craves leave to amend or alter any....

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....on/discount extended to the prepaid distributors under Sec. 194H of the Act, thus concluded that the amount of Rs. 66,03,56,590/- was liable to be disallowed under Sec. 40(a)(ia) of the Act. On the basis of his aforesaid deliberations the A.O disallowed the amount of Rs. 66,03,56,590/- and vide his order dated 21.03.2014 assessed the income of the assessee company at Rs. 247,65,56,980/-. 4. Aggrieved, the assessee carried the matter in appeal before the CIT(A). The CIT(A) after deliberating on the contentions advanced by the assessee in the backdrop of the facts of the case observed, that his predecessor while disposing off the appeals in the case of the assessee for the immediately preceding years i.e. A.Y 2009-10 and A.Y 2010-11 had dele....

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....ncy, thus the discount given by the assessee on sale of prepaid starter kits/sim cards to the distributors would not be liable for deduction of tax at source under Sec. 194H of the Act. It was averred by the ld. A.R that the Tribunal on the basis of its aforesaid observations had concluded that the assessee could not be held to be in default under Sec.201(1) and 201(1A) of the Act, by observing as under: "7. We have considered the submissions of the parties and perused the material available on record in the light of the decisions relied upon by the learned Authorised Representative and the learned Departmental Representative. As could be seen, the Assessing Officer has treated the assessee as assessee in default alleging nondeduction of ....

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.... can be returned back to the assessee. From the aforesaid facts, it is clearly evident that as far as sale of starter kit/sim card is concerned, it is purely a purchase/sale transaction on principal-to-principal basis and there is no relationship of agency. That being the case, the provisions of section 194H are not applicable. The Hon'ble Karnataka High Court after examining in detail the aforesaid factors have decided the issue in favour of the assessee by reversing the order of the Tribunal. In view of the changed scenario, after the order of the Hon'ble Karnataka High Court as referred to above, the decision of the learned Commissioner (Appeals) cannot be sustained. In fact, ITAT, Jaipur Bench, in case of M/s. Tata Teleservices Ltd. V/s....